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24.12.2008
Credit-Rating downgrades Rise CJSC`s bonds to uaBB
Credit-Rating, a nationally recognized credit rating agency in Ukraine has today announced that it downgraded to uaBB from uaBBB the long-term credit rating assigned to registered coupon bonds (series A) issued by Kiev-based Rise CJSC (`issuer` or `company`). The amount of the issue is UAH100m due May 23, 2011. The company`s principal activity is wholesale trade with agricultural machinery and spares, crop protecting products, seeds, mineral fertilizers, and agricultural produce. To revise the rating Credit-Rating considered issuer`s financial statements for 1H2008 and its other inside information.
An obligor or a debt liability with uaBBB credit rating is characterized with the SUFFICIENT creditworthiness as compared to other Ukrainian obligors or debt liabilities. This level of creditworthiness is affected by adverse changes in commercial, financial and economic conditions.
Factors maintaining the credit rating
- The Rise group, which incorporates the issuer, enjoys strong standing in the sector of agricultural machinery, seeds and crop protecting products.
- Issuer`s high key figures, specifically the company`s sales advanced 1.7x to UAH1.4bn in 1H2008 as compared with the figure recorded in 1H2007, with the EBITDA grown 3.3x to UAH223.2m, and the EBITDA profitability increased by 10.4 p.p. to 15.5%.
Factors constraining the credit rating
- Issuer`s significant debt burden (as of June 30, 2008 the ratio of net debt to the EBITDA recorded for the past 12 months is 4.1) and its anticipated rise under devaluating national currency.
- Company`s eroded liquidity under turbulences in the financial market and opacity with regard to probability for refinancing of issuer`s obligations.
- Issuer`s vulnerability to changes in state agricultural policy and seasonality of demand.
Information on all credit ratings assigned in accordance with the National Rating Scale may be found in REUTERS and BLOOMBERG information systems.
For more information, please contact:
Information and analytic department
Sergey Rozumyak +38 044 490 25 50
SRozumyak@credit-rating.ua
